What’s an ICO?: Your Next Potential Investment
You may have heard of an IPO, or initial public offering, but that doesn’t stop plenty of people from still having the question, “What’s an ICO?” To start, “ICO” is an acronym that stands for “initial coin offering.” ICOs are one way cryptocurrency startups and other businesses raise capital, and they share traits with IPOs on a stock market. Without ICOs, we would not have the cryptocurrency market that we do today. Not only do ICOs benefit startup companies, but they offer many advantages to those who want to invest as well.
What’s an ICO?
An ICO is created when a company wants to raise capital for a new endeavor. It’s a way for firms to raise money without offering stock or going directly to investors. Instead, these startups offer their own online currencies or “tokens”, in this sort of crowdfunding. Those who want to invest provide payment, usually in the form of another cryptocurrency, in exchange for some of the new cryptocurrency. Once the new technology is released, investors hope to make money by watching the coin’s value grow. Generally speaking, ICOs are unregulated by the SEC. However, there are a few conditions that will make an ICO subject to regulation, such as if it offers securities or if the coins offer an ownership stake in the startup. However, in most ICOs, this is not the case. Some recent examples can demonstrate how ICOs are put into action.
Filecoin
In 2017, Filecoin became the largest ICO in history, raising $257 million. Filecoin’s goal is to help decentralize online storage. Many current platforms are prone to data hacks, but Filecoin’s platform would allow small data operators to store pieces of your encrypted files based on who gave the best bid for them. The location of each file is stored on the Filecoin blockchain. Then, when you need to access your file, it gets decrypted and pieced back together. Filecoin aims to protect your data and give you the lowest possible price to store your files.
OX Fina
In August of last year, OX Fina raised over $770,000 just on the first day of its ICO. OX Fina, according to its own website, has created “awesome tools that will help designers, developers and companies create a decentralized process of verification of their clients.” The company wants to bring blockchain technology into everyday business ventures, such as decentralized ledgers and smart contracts.
Why You Should Invest in an ICO
Many people choose to invest in an ICO because they are interested in the services the coin will eventually provide. Others invest because they see the potential for the value of the coin to grow. Keep in mind that investing in an ICO also means betting that the project will be completed. Although there is no guarantee, there have been several successful ICOs to date. For example, the cryptocurrency Stratis’ ICO price was $0.007, and today it has increased by more than 42,000% to $3.067. Although there are ICOs that are bound to be successful, the aforementioned Filecoin decentralized storage project has yet to be completed.
How to Invest in an ICO
The first step to investing is being able to answer the question, “What’s an ICO?” Now that you know more about ICOs, you might be ready to invest! If you think you’ve come across an ICO that’s worth getting involved in, the next steps are relatively simple. Although ICOs will vary, here is a general list of steps to take to invest in an ICO:
Research the ICO and the project the startup wants to take on.
Purchase Bitcoin, Ethereum, or other cryptocurrency to pay for the new coin. Just stop by your nearest Pelicoin ATM to purchase Bitcoin, Ethereum, or Litecoin with ease!
Send your cryptocurrency to the ICO programmer. If you already know their wallet address, you can buy cryptocurrency and send it to them directly from any of our cryptocurrency ATMs.
Hold onto the new coin until it starts to grow in value.
Get Started with Cryptocurrency Today
If you’re ready to get some cryptocurrency of your own, visit a Pelicoin ATM today! We have locations all over Louisiana and Tennessee to help you get cryptocurrency today. If you have any questions for us, please contact Pelicoin at support@pelicoin.com or (504) 507-0879.